No govt financing, sovereign-guaranteed loans for new PIA aircraft: PM's finance adviser
Adviser to the Prime Minister on Finance Khurram Schehzad clarified on Sunday that the government was not buying any aircraft for the Pakistan International Airlines (PIA), which was privatised through an auction in December last year.
“The government is neither buying aircraft for a privatised PIA, nor has it announced any sovereign guarantee of taxpayer-funded loan for doing so,” Schehzad posted X following claims on social media that a minister was arranging and negotiating sovereign-linked financing for the jets.
The claims came after a recent meeting between Finance Minister Muhammad Aurangzeb and Chair of the US Export-Import (Exim) Bank John Jovanovich on the sidelines of the 81st session of the United Nations General Assembly in New York.
The finance ministry said about the meeting that the two discussed the Reko Diq mining project and funding opportunities for procuring an aircraft for Pakistan International Airlines (PIA). The finance minister shared PIA’s interest in Boeing’s 787 Dreamliners and “sought support for a financing package covering aircraft and engines”.
But, Schehzad pointed out in his post that the US Exim’s “mandate, like export credit agencies elsewhere, is to support its country’s exports and jobs”.
“Boeing aircraft are US exports. US Exim provides financing support to foreign purchasers of US-manufactured aircraft, including airlines, through established financing structures.
“US Exim’s own framework provides for asset-backed aircraft financing, where financing can be secured against the aircraft itself and credit assessed on the airline/lessee and/or guarantor, if any. A sovereign guarantee is therefore not an automatic requirement,” he added.
Explaining the government’s role regarding the potential acquiring of the aircraft, he said, it was doing “exactly what governments around the world are expected to do for their businesses: opening doors, facilitating access to international financing, technology and suppliers and promoting investment and commercial opportunities”.
He added that the finance minister’s engagement with US Exim was not even confined to PIA. It covered potential financing across aviation, refinery upgrades and Reko Diq as part of a much broader Pakistan-US economic engagement.
“And this is entirely consistent with Pakistan’s economic direction,” Schehzad remarked.
He added that the government was “deliberately reducing the state’s role in commercial activity, pursuing privatisation and creating greater space for private capital. Private-sector-led growth does not mean government abandons the private sector; it means government enables it rather than running businesses itself”.
“Therefore, claims of a ‘public loan, hidden subsidy, state backstop’ or taxpayers assuming PIA’s commercial risk should not be presented as facts when no such arrangement has been announced. The official statement refers to potential US Exim financing support; it does not announce government borrowing for PIA or a sovereign guarantee.
“Privatisation transfers ownership and commercial management. It does not require the government of Pakistan to stop opening doors for Pakistani companies,” he said.
